Huhne to ''get tough'' with power firms

20 September 2011

Energy and Climate Change Secretary Chris Huhne has promised that he will "get tough" with British Gas, E.On, EDF, Npower, Scottish Power and Scottish and Southern in a bid to get a better deal for consumers.

Among the change Huhne said he wanted to see are stronger powers for Ofgem to fine energy companies for "bad behaviour" and the companies being obliged to tell their customers if they could get their power cheaper elsewhere. He also wants to see an end to online discounts which discriminates against those who do not have internet access.

"It's not fair that big energy companies can push their prices up for the vast majority of their consumers, who do not switch, while introducing cut-throat offers for new customers that stop small firms entering the market," he said at the Liberal Democrat autumn conference in Birmingham. "That looks to me like predatory pricing. It must and will stop."

Huhne added: "We want simpler tariffs. Requiring energy companies to tell you whether you could buy more cheaply on another tariff. And you can save real money. Ofgem, the independent regulator, calculates that the average household could save £200 by switching to the lowest cost supplier – but fewer than one in seven households do so. Britain privatised the energy companies, but most consumers never noticed. Consumers still think that they face the same bill whoever they go to.

"So I want to help households save money. With simpler charging. Clearer bills. Quicker switching. I also want more consumer-friendly firms – co-ops, partnerships, consumer charities – dedicated to doing the shopping around for consumers to make sure that you are always on the best deal, even if you do not have time to check yourself. Ofgem should also have new powers to secure redress for consumers – money back for bad behaviour. And we will stop the energy companies from blocking action by Ofgem, which can delay matters by a year.

"We want to encourage new small companies to come into the market. Cutting red tape so they can grow bigger. Making it easier for them to buy and sell electricity in the wholesale market. And with Ofgem, we are cracking down on any bad practice that could smack of being anti-competitive."

Still promising to deliver the greenest government ever, Huhne said: "I can hardly pick up a Tory paper these days without a whinge about energy and climate change policies. Personally, I have no doubt that climate change is one of the greatest challenges we face. But if you are facing a pay squeeze or even worse a lost job, if your pay packet no longer buys what you need, people understandably put other priorities higher up the scale. As always during hard times, every other issue pales into insignificance besides the big issues of earning your living. Keeping your job. Making ends meet. But cutting carbon is not a luxury to be ditched when the going gets tough. It is essential to the survival of mankind as a species."

He went on: "Some people argue that we should not be pushing low carbon business, because no-one else is. Nonsense. Look at China, with six of the biggest renewable companies in the world. Installing wind turbines across the South China Sea. Building 28 nuclear power stations in the time it will take us to build one. Building 10,000 miles of high speed rail in the time we will take to go from London to Birmingham. Covering 40 per cent of the Chinese population with low carbon economy zones. If that's doing nothing, then climate sceptics have a weird idea of zero.

"Other people argue that we cannot afford to boost the low carbon economy. It would be cheaper, they say, to rely only on oil and gas. To say it is to laugh at it. World gas – and hence electricity – prices have leapt by a third thanks to Libya and far eastern growth. Global factors. So we should surely try to limit our dependence on oil and gas, not increase it. Particularly as our own North Sea resources are running down. In the storm-tossed seas we have to sail, low carbon energy gives us security. Assurance. Safety.

"British energy consumers will on average be better off in 2020 thanks to our low carbon policies. Yes, I said better off. Getting off the oil and gas price hook and onto clean, green energy makes sense. And with energy saving, we can offset the effects of higher prices and end up with lower bills. In one generation, we will go from fossil fuel smokestack to low carbon cash back."

Turning to the current situation, Huhne said the government was determined to help.

"Higher energy bills hurt," he said. "None of us should have to save on warmth in a cold winter. Some of the most vulnerable and elderly will shiver – and worse – if we do not help. That is why this government is boosting by two-thirds the discounts to help people in fuel poverty. Why our Warm Homes Discount is a statutory scheme, not a grace and favour handout relying on energy companies' good will. That is also why this government will make those in fuel poverty a top priority for the Green Deal, helped by our ECO subsidy. Improving people's homes cuts fuel poverty forever, while a discount only cuts fuel poverty for a year.

"Year after year, fuel poverty rose under Labour. Now we are helping the poor where Labour flannelled. We are acting where Labour talked. We are delivering where Labour failed. Labour and Ed Miliband had 13 years to get this market right, and all they can do now is call for another inquiry by the Competition Commission. Another delay of two years. Another chance to sit on the fence. How feeble!"

Huhne also stressed how the government should work closely with Europe on the environment and fuel exports.

"We will not, as Liberal Democrats in government, weaken the ties that deliver our national interest through Europe," he said. "For Liberal Democrats compromise is not and cannot be a dirty word.

"[In America] the markets looked over the brink when the mad-cap Republican right in Congress would not compromise with the President. Let that be a warning to the Conservative right here: we need no Tea Party tendency in Britain. If you fail to compromise, if you fail to seek the common ground that unites us, if you insist that only you have the answers, if you keep beating the anti-European drum, if you slaver over tax cuts for the rich, then you will put in peril the most crucial task of this government. You will wreck the nation's economy and common purpose. We are all in this together and we can't get out of it alone."